Octopus backs bitcoin firm Elliptic

Ellie Pullen
16 July 2014

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Octopus Investments has led a $2m funding round for Elliptic, the London-based provider of an insured bitcoin storage service.

The company claims its Elliptic Vault product is the world's first insured bitcoin storage.

The fresh capital will allow Elliptic to finance further product development and customer acquisition. It recently secured Jersey-based Global Advisors Bitcoin Investment Fund, which is the first Jersey-approved and regulated bitcoin fund.

The seed funding round saw several angel investors back the company alongside Octopus, which said the round is the first major venture capital investment in a bitcoin storage company in the UK.

"We started looking at the bitcoin and cryptocurrency sector in mid-2013," said Octopus Ventures team member Frederic Lardieg. "We decided to start looking initially at the security stage. You hear a lot about security issues with bitcoin - people losing their bitcoins or their wallets getting hacked."

Elliptic's storage technique means that bitcoins are never stored online. The security steps the company takes to store and release bitcoins means that it was able to get an insurer on board that will provide compensation if bitcoins are lost.

At the start of this year, unquote" explored investment opportunities in the cryptocurrency sector and whether Europe's venture firms were likely to jump on the bitcoin bandwagon as investors in the US continue to crowd into the space.

Previous funding
Elliptic is believed to have received an earlier seed funding round in February from Seedcamp.

Company
Founded in January this year and headquartered in London, digital asset business Elliptic has developed the Elliptic Vault, an insured bitcoin storage service.

The company uses a "deep cold storage" technique, which means bitcoins are stored offline and encrypted with private keys.

The service is targeted at businesses and financial institutions, and has already attracted hedge funds and law firms. The company currently employs five staff.

People
James Smith is the CEO of Elliptic. Frederic Lardieg is a member of Octopus's venture team.